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NexPoint Real Estate (NREF) Prices $75M Senior Notes Due 2026

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NexPoint Real Estate Finance, Inc. NREF has priced the previously announced public offering of $75 million in aggregate principal amount of senior notes due 2026. The notes have been issued as senior unsecured obligations and carry a coupon rate of 5.75%.

The offering is anticipated to close on Apr 20, 2021, conditional on customary closing norms.

NexPoint Real Estate plans to contribute the net proceeds from the offering to its operating partnership (“OP”) — NexPoint Real Estate Finance Operating Partnership, L.P. — in exchange for OP units. The OP then plans to exchange the net proceeds for OP units of its wholly-owned subsidiary partnership (OP IV). Finally, OP IV will allocate such proceeds for the acquisition of investments in line with NexPoint Real Estate’s investment strategy.

Markedly, NexPoint Real Estate primarily focuses on investments in real estate sectors, including single-family rental, multifamily and self-storage, mainly in the top 50 metropolitan statistical areas. Also, it concentrates on lending or investing in stabilized properties or those properties that have a “light-transitional” business plan.

Notably, NexPoint Real Estate’s efforts to strengthen its near-term liquidity in these testing times and opportunistically tap the debt market amid the current low-interest-rate environment are strategic fits. As of the fourth-quarter 2020 end, cash and cash equivalents were $30.2 million.

However, the notes offering increases the company’s long-term debt obligation. As of Dec 31, 2020, total debt stood at $1.04 billion. Moreover, weighted average term of debt was 6.4 years, while weighted average cost of debt was 2.49%.

Shares of this Zacks Rank #3 (Hold) company have jumped 80.4% over the past year compared with the industry's rally of 70.8%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Safehold Inc.’s SAFE Zacks Consensus Estimate for 2021 EPS has been unchanged at $1.40 over the past month. The company currently carries a Zacks Rank of 2.

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Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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